SINGAPORE: Brent oil may consolidate in a narrow range of $106.14-$116.26 per barrel for one or two days before falling again.

The bounce from the March 9 low of $105.60 roughly defined the consolidation range.

The consolidation may consist of three waves. So far, only two have completed.

The wave c is unfolding towards $116.26.

Due to the completion of a five-wave cycle from $65.72, oil may eventually fall to $93.76, the 61.8% retracement of the cycle.

A break below $106.14 could confirm the continuation of the downtrend towards this level, while a break above $116.26 could lead to a gain into $119.96-$123.65 range.

On the daily chart, a five-wave cycle from $15.98 may have completed, as strongly suggested by the deep drop from the March 7 high of $139.13.

A retracement analysis on the downtrend from the 2008 high of $147.50 to $15.98 reveals a break below a support at $116.46.

The break opened the way towards $97.26.

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